ATR% Multiple from MA

This indicator builds upon the original idea by jfsrevg of using the ATR% multiple from a daily 50-period moving average to highlight when a stock or instrument is extended relative to its own volatility. My version expands on this by incorporating an ADR% (Average Daily Range percentage) volatility filter, which helps refine the signals to adapt better to different instruments and timeframes.

What it does:

• Calculates the 50-period simple moving average (SMA) using daily data as the baseline trend reference.
• Measures the instrument’s Average True Range (ATR) relative to the current close (ATR%).
• Uses this ratio to identify when an instrument is significantly extended above its average volatility-based range.
• Adds a dynamic ADR% filter — computed as the average daily range divided by the daily close — to adjust the extension threshold dynamically based on recent price volatility.
• Plots small circles above price bars when extension conditions are met, signaling potential overbought conditions.
•The script works on both daily and weekly timeframes, but all volatility calculations are based on daily data to ensure consistency.

How to use:

• Traders can use this indicator to spot when a stock or instrument is significantly stretched relative to its own volatility, which may signal a good time to scale out or manage risk.
• The dynamic ADR% filter helps reduce false positives by adjusting thresholds based on market conditions.
• Use the customizable settings for ATR length, SMA length, and ADR length to fine-tune the indicator for your preferred instruments.

Original Contributions:

• Integrated an ADR% filter that refines the extension threshold based on real-time volatility.
• Added dynamic thresholds that adapt to market conditions, making the indicator more reliable across different instruments and timeframes.
• Maintained daily volatility calculations while allowing signals to appear on both daily and weekly charts.